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With unsold inventory and production cuts reflecting an automotive market slowdown, the Indian auto industry is upset with the National Democratic Alliance government’s ambitious targets for bringing in electric mobility in the two- and three-wheeler segments.

Auto-industry body the Society of Indian Automobile Manufacturers (SIAM) has said the proposal by the government’s policy think-tank Niti Ayog to ban sales of gasoline and diesel three-wheelers by 2023 and permit only electric two-wheelers in the sub-150cc category by 2025 will disrupt the industry, The Times of India reports.

Both SIAM and the Confederation of Indian Industries (CII) have said they do favor electric mobility but expressed concern over the haste with which the government was pushing it and called for consultation with industry stakeholders.

SIAM has argued that at present neither the frontline manufacturing industry nor the component suppliers have proper experience or expertise in electrical vehicles to make a successful switch in a couple of years.

Some industry experts pointed out that the costs involved in switching to electric were a major hurdle. They also cautioned against hasty localization and called for a practical approach without disrupting the auto industry.

The Indian auto market currently is in the process of switching over to more stringent Bharat Stage-VI emission norms, and SIAM claims the industry has cumulatively invested close to 800 billion rupees (US$11.51 billion) for that purpose.

The recent slowdown in the market has only added to the challenges. Many auto companies are facing a steep rise in unsold inventories and resorting to production cuts. The market is unlikely to pick up unless the forthcoming monsoon season is bountiful and demand during festival season is strong.

Also Read: India’s Maruti cuts output amid weak demand

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